How this Taiwanese chip guru made an astonishing U-turn

Robert Tsao is making waves. The founder of United Microelectronics Corp (UMC), Taiwan’s second-largest chip manufacturer, was one of the self-ruled island’s semiconductor gurus to pour money and technology into mainland China two decades ago, upsetting the administration in Taipei at the time. Now he faces Beijing’s ire.

Tsao, 75, has become the industry’s public face of standing up to mainland China, promising in August to donate NT$3 billion (US$100 million) to the island’s defence to fend off a possible attack. In a press conference in Taipei last week, Tsao stood in a blue, bulletproof vest and vowed that he would “never live to see Taiwan become another Hong Kong”.

Tsao’s shift from cherished visitor – he was one of the guests of honour at a symposium hosted by Xiamen University as late as 2010 – to persona non grata on the mainland – comes at a time of rising geopolitical tensions across the Taiwan Strait, and between Washington and Beijing over strategic technology such as semiconductors. The mainland regards the self-ruled island as a renegade province and has threatened to take it back by force if necessary.

According to Tsao’s official biography, he was born in mainland China in 1947 but raised in Taiwan. He has a bachelor’s degree in electrical engineering from National Taiwan University and a master’s degree in management science from National Chiao Tung University in 1972. He later joined the Taiwan government-backed Industrial Technology Research Institute and was one of the pioneers of Taiwan’s first integrated circuit manufacturing line, which later became UMC in 1980.

Like Richard Chang, who led a group of Taiwanese chip engineers 22 years ago to set up Semiconductor Manufacturing International Corporation (SMIC), now China’s top chip maker, Tsao was previously seen as a key figure in supporting China’s early chip development, investing millions into HeJian Technology in Suzhou city, which became the mainland’s second-largest foundry.

The deal angered the then Taiwan administration under Chen Shui-bian and Tsao was charged in Taipei with wrongdoing although not convicted of anything. Tsao resigned from UMC in 2005 and later renounced his Taiwan citizenship, migrating to Singapore in 2011.

Tsao kept up good relations with mainland China over the years. As a collector of Chinese antiques, he sold a vase in 2008 for HK$65 million (US$8 million) and donated half of the proceeds to disaster relief in southwestern Sichuan province after the massive earthquake there via Taiwan charity organisations, according to the Chinese News Service, a China news agency.

China’s state television channel CCTV made a documentary about Tsao in 2010, praising his work and when he visited Chengdu, capital of Sichuan, in 2010 he was welcomed by the then mayor Ge Honglin, according to the Chengdu Daily.

But Tsao’s relationship with the mainland has deteriorated in recent times.

In an interview with Taiwan media outlet Wealth Magazine in early 2020, Tsao expressed regret over setting up a chip plant on the mainland. “I wish we hadn’t gone to the mainland to assist in setting up a chip factory,” he was quoted as saying.

In a recent interview with Radio Free Asia, a channel funded by the US government, Tsao said he made up his mind to oppose mainland China after seeing the social unrest in Hong Kong in 2019, particularly the night of July 21 when a group of people dressed in white shirts attacked civilians in the Yuen Long MTR station.

Tsao’s open criticism of China and its ruling Communist Party has reverberated across his business associations. HeJian issued a statement on its website last month, saying that Tsao retired from UMC more than 10 years ago and currently had no relation with the company. UMC also said that Tsao no longer had a relationship with the company.

Ma Xiaoguang, a spokesman for the Taiwan Affairs Office of the State Council, described Tsao’s defence donation and comments as a distortion of basic facts that smeared the Chinese mainland and his stand on “Taiwan independence” does not represent the “vast majority of Taiwan residents”.

Xiang Ligang, a Beijing-based analyst, wrote a piece blasting Tsao’s new stance as a sign of the “excessive ego” of Taiwan’s semiconductor industry. “China is the foremost chip market in the world … if you make an enemy of mainland China, you are making an enemy of yourself.”

Although Tsao is no longer an active executive in the semiconductor industry, his about-face is a sign of the times in the self-ruled island. The Taiwan administration under current leader Tsai Ing-wen has promoted the concept of “democracy chips” with US politicians, a loosely defined concept that aims to boost chip supply chain integration between Taiwan and the US while marginalising China’s role in future semiconductor supply chains.

Chiang Shang-yi, a 76-year-old Taiwanese semiconductor industry veteran who helped build the world’s largest contract chip foundry Taiwan Semiconductor Manufacturing Co, has also called his two stints at SMIC “one of the foolish things” he has done, according to an interview transcript published last month of a March interview with California-based Computer History Museum. South China Morning Post